New Jersey Supreme Court adopts Ellerth/Faragher Defense While Expanding the Definition of “Supervisor” under the LAD
March 24, 2015
By: Lauren Kavanagh and James Prusinowski
In Aguas v. State of New Jersey, 2015 WL 659543 (N.J. Feb. 11, 2015)
the New Jersey Supreme Court handed a double edged sword to employers. In a nod to employers, it officially adopted the Ellerth/Faragher affirmative defense for hostile work environment supervisor sexual harassment claims under the New Jersey Law Against Discrimination (“LAD”). On the other hand, however, it significantly expanded the definition of “supervisor” for the purposes of a vicarious liability under LAD claims, something that the U.S. Supreme Court has explicitly rejected for Title VII claims. This adoption may expose employers to greater liability for these claims. The Aguas decision is an important case and reaffirms the need for employers to reexamine their harassment policies, procedures and identify any employees who may now be considered “supervisors” under the LAD.
In Aguas, plaintiff was an employee of the State of New Jersey Department of Corrections (“DOC”). She alleged that she experienced a hostile work environment resulting from being sexually harassed by her supervisor. Instead of filing a written complaint pursuant to DOC policy, she orally complained to her supervisors and refused to participate in a group meeting with her direct supervisor for fear of retaliation. Id. at 3. The DOC subsequently formally investigated her claims and found them to be unsubstantiated. Id. Aguas then filed suit under the LAD.
In reviewing the facts of the Aguas case, the New Jersey Supreme Court formally adopted the Ellerth/Faragher affirmative defense for supervisor sexual harassment cases in which a hostile work environment is claimed. Id. at *17. The Ellerth/Faragher affirmative defense was created by the U.S. Supreme Court for employers against vicarious liability claims of sexual harassment under Title VII that are based on agency principles. This defense allows employers to assert that they “exercised reasonable care to prevent and correct promptly any sexually harassing behavior,” while asserting that “the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.” Id. at *16. This affirmative defense, however, is not available to employers in the event of an adverse employment action like discharge or demotion against the employee. Id. While this defense has been available under federal law since 1998, the New Jersey Supreme Court had not explicitly adopted it for New Jersey LAD claims until now.
Applying the Ellerth/Faragher defense, the Court in Aguas reversed the Appellate Division’s affirmance of summary judgment for the DOC and remanded the case back to the trial court. The Court held that the, “State [employer] may avoid vicarious liability under Restatement§ 219(2)(d) by demonstrating by a preponderance of the evidence that the DOC exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and that Aguas unreasonably failed to take advantage of any preventive or corrective opportunities provided by the DOC, or to avoid harm otherwise.” Id. at *17.
However, while granting this affirmative defense to employers, the New Jersey Supreme Court expanded the definition of a supervisor under the LAD. The U.S. Supreme Court had explicitly limited the definition of a supervisor under Title VII to only those employees with authority to make tangible employment decisions. Id. at 19. The New Jersey Supreme Court disagreed with the limited definition of employer provided by the U.S. Supreme Court, and found that limiting the definition of supervisor in that way was too restrictive and ignored the “importance… of a supervisor’s authority to control the day-to-day working environment,” in sexual harassment cases. Id. at 20. Thus in Aguas, the Court remanded the case back for fact finding on whether Aguas’ alleged harasser was a “supervisor” by determining if: “(1) he was authorized to undertake tangible employment decisions affecting Aguas; or (2) he was authorized by the DOC to direct her day-to-day work activities.” Id. This broader definition, the Court reasoned, achieves the overall goal of the LAD to eradicate sexual harassment in the workplace and incorporates the wide range of “supervisors” in various types of employment structures in the workplace. Id.
The Aguas case is extremely important because it reminds employers that they a) must maintain and update harassment policies and procedures, b) must train their employees on utilizing these policies and c) must enforce them in order to utilize them as a defense in supervisor sexual harassment cases. Additionally, the Aguas case broadly expands the definition of a supervisor in such cases, which now is defined as anyone who may direct the day-to-day activities of another employee. Employers should review the roles of their employees and provide additional training to those who may now be considered supervisors under New Jersey law.
For assistance in evaluating your business’s sexual harassment policies in light of the Aguas decision, or if you have any questions about any other labor and employment matter, please contact any member of Trimboli & Prusinowksi, LLC at 973-660-1095.